The Patna High Court has clarified the interplay between limitation objections and the mandatory right to a personal hearing under Section 75(4) of the GST laws. In this 2024 oral judgment, a division bench comprising the Hon’ble the Chief Justice and Hon’ble Mr. Justice Partha Sarthy disposed of a writ petition challenging a GST assessment. While the petitioner’s contention on limitation stood concluded against it by an earlier coordinate bench decision, the Court nevertheless set aside the impugned assessment order and the corresponding GST DRC-07 on a narrow but significant ground: the absence of a personal hearing as required by statute. The matter was remitted to the Assessing Officer with a fixed date for appearance and a time-bound direction to pass a fresh speaking order.

The Court began by recording that the petitioner’s limitation arguments were already “answered” against the taxpayer in a previous batch matter (C.W.J.C. No. 4180 of 2024, decided on 27.11.2024). With that issue closed, the bench turned to a foundational procedural safeguard built into GST adjudication: Section 75(4), which mandates a personal hearing where an adverse decision is contemplated. The petitioner demonstrated that no personal hearing was granted before finalizing the assessment. Acknowledging this statutory requirement, the Court held that the failure to afford a hearing vitiated the proceedings, irrespective of the outcome on limitation. In consequence, both the assessment order and the issued summary in Form DRC-07 were quashed for violation of the statutory mandate.

Importantly, the Court did not grant the substantive relief sought on limitation. Instead, it struck a careful balance between procedural fairness and revenue adjudication by sending the matter back to the Assessing Officer. The bench directed the assessee to appear before the authority on a specified date (15.01.2025). If the petitioner appears as directed—on that date or on the next date if one adjournment is taken—the Assessing Officer must then conclude the proceedings and pass a fresh order within three months from the date of the High Court’s judgment or within the applicable statutory limitation period if it has not expired, whichever is later. This ensures a swift, legally compliant re-adjudication without unduly prejudicing either side’s rights.

From a compliance perspective, this judgment reiterates that procedural lapses—especially the denial of a personal hearing—are fatal to the sustainability of a GST assessment. Even when a taxpayer’s other legal defences (such as limitation) are construed unfavourably due to binding precedent, the department must still adhere to the due-process requirements expressly provided under the statute. The Court’s insistence on a fresh hearing and a time-bound re-decision provides predictability and discipline to the adjudication process.

For businesses and tax officers alike, the message is clear: (i) the right to be heard is not an empty formality in GST; (ii) authorities must document that a personal hearing was offered and conducted when an adverse decision is proposed; and (iii) courts will not hesitate to invalidate orders passed in breach of Section 75(4), even when other legal issues weigh against the taxpayer. On the flip side, the judgment also underscores that taxpayers cannot secure conclusive relief merely by raising limitation arguments already settled by a coordinate bench. The proper course is to return to the assessing authority for a hearing on the merits, with both parties bound by the Court’s directions on timelines and procedure.

Significance or Implication of the Judgment (For general public or government)

This decision is significant on three fronts:

1. Reinforcement of Due Process: It powerfully reaffirms that personal hearing under Section 75(4) is mandatory before final adverse orders. Government departments must not treat it as optional; skipping it risks the entire order being set aside.
2. Efficient Remand Framework: By fixing an appearance date (15.01.2025) and a three-month outer limit (subject to the statutory limitation rule), the Court promotes timely completion of reassessments. This is crucial for revenue certainty and taxpayer finality.
3. Balanced Approach on Substantive vs. Procedural Issues: Even when a taxpayer’s legal arguments on limitation are foreclosed by precedent, procedural safeguards remain independently enforceable. This promotes fairness without compromising the integrity of the tax system.

For the general public and businesses, the case is a reminder to actively seek and attend personal hearings, present evidence, and insist on a reasoned order. For the government, it is a call to standardize hearing notices, maintain proper hearing records, and ensure compliance with Section 75(4) in every adverse adjudication.

Legal Issue(s) Decided and the Court’s Decision with reasoning

• Limitation challenge to assessment
  • Decision: Decided against the petitioner by reference to a prior binding decision of the Patna High Court (C.W.J.C. No. 4180 of 2024, decided on 27.11.2024).
  • Reasoning: The coordinate bench judgment had already settled the issue; the present bench followed that ruling and did not reopen limitation.
• Denial of personal hearing under Section 75(4), GST laws
  • Decision: In favour of the petitioner; the assessment order and DRC-07 were set aside.
  • Reasoning: Personal hearing is a statutory mandate under Section 75(4) whenever an adverse order is contemplated. Non-compliance vitiates the proceedings. The Court remitted the matter for fresh adjudication after providing a hearing, with a fixed appearance date and a time-bound direction to conclude.
• Remand with timeline
  • Decision: The assessee must appear before the Assessing Officer on 15.01.2025 (or on one adjourned date), and the Assessing Officer must pass a fresh order within three months from the date of judgment or within the statutory limitation period, whichever is later.
  • Reasoning: To balance fairness and administrative efficiency, the Court ensured procedural compliance without causing undue delay.

Judgments Relied Upon or Cited by Court

• M/s Barhonia Engicon Private Limited v. Union of India & Ors., C.W.J.C. No. 4180 of 2024, Patna High Court, judgment dated 27.11.2024 (relied on to reject limitation plea).

Case Title

• Petitioner v. Union of India & Ors. (GST assessment challenge)

Case Number

• Civil Writ Jurisdiction Case No. 11543 of 2024.

Coram and Names of Judges

• Hon’ble the Chief Justice
• Hon’ble Mr. Justice Partha Sarthy
  (Oral judgment dated 18.12.2024)

Names of Advocates and who they appeared for

• For the petitioner: Mr. D. V. Pathy, Advocate
• For the respondents: Dr. K. N. Singh, ASG; Mr. Anshuman Singh, Sr. Standing Counsel (CGST & CX); Mr. Vivek Prasad, GP-7.

Link to Judgment

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